Crescent Point sheds assets, targets debt
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Gary Park for Petroleum News
Crescent Point Energy is beating a hasty retreat from its glory days when it was Canada’s 12th largest oil and gas producer, with major holdings in Saskatchewan and Utah.
Now faced with wrestling down a net debt that peaked at C$4.4 billion last year, it launched a bold turnaround strategy when Craig Bryksa took over the helm from long-time Chief Executive Officer Scott Saxberg and has so far generated asset sales of C$1.3 billion.
The biggest in that process occurred Sept. 3 when two bundles of assets (C$700 million for 20,000 barrels of oil equivalent per day of production in the Uinta Basin of Utah and the balance for 7,000 boe per day in Saskatchewan) were sold to multiple unnamed buyers for C$912 million, freeing Crescent Point to focus on its core oil properties.
The announcement “is the latest example of significant changes our team has implemented within a short period of time that supports our strategy to focus our asset base and improve our overall efficiencies,” Bryksa told analysts.
“I think we have made significant strikes in getting our balance sheet where we want it to be,” he said of the company’s goal to reduce its net debt to C$2.75 billion by the end of 2019.
Bryksa said Crescent Point’s hope is to pursue additional asset sales, including adjustments to its Saskatchewan conventional oil assets that require specialized drilling and secondary recovery methods to force light oil to the surface.
The company now expects capital spending will be unchanged this year at about C$1.3 billion, while it plans to buy back some shares from investors.
Eight Capital analyst Adam Gill said the Crescent Point leadership has finally “got something done,” adding that the value of the transactions was reasonable given the current difficulty of reaching deals in Canada.
The challenge was reflected by oil sands producer Cenovus Energy, when it pulled an asset package off the market earlier this year after offers fell short of its objective.
- GARY PARK
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